3 Energy Stocks Leading the Clean Energy Transition in 2024

The world is experiencing a substantial transition toward cleaner energy sources as part of its commitment to combat greenhouse gas emissions. Energy companies are facing mounting pressure from various angles to address climate change. While most analysts anticipate renewable energy to play a crucial role in meeting future energy needs, it is widely acknowledged that the demand for oil and natural gas will not be entirely eliminated.

According to the U.S. Energy Information Administration (EIA), there is a projection that the share of renewables in the electricity generation mix could double by 2050. This projection underscores the increasing significance of renewable energy sources in the long-term trajectory of the energy landscape.

The overarching trend in the energy sector indicates a substantial rise in the consumption of renewable energy.

Can the Winning Streak Continue in 2024?

The 2024 outlook for the clean energy industry is quite promising, driven by several key factors and trends. The EIA anticipates 17% growth in renewable deployment, reaching 42 gigawatts in 2024 and accounting for nearly a quarter of electricity generation.

The solar sector, in particular, has seen impressive growth, with solar power expected to continue leading the way in electricity generation growth for 2024 and 2025.

As of 2024, numerous oil and gas companies have taken the lead in embracing clean energy initiatives, making substantial contributions to sustainability goals and the transition toward clean energy.

Here, we have discussed three companies, each carrying a Zacks Rank #3 (Hold) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Exxon Mobil Corporation XOM, traditionally known for its role in the oil and gas industry, has recently taken significant strides in leading the clean energy transition. Recognizing the growing urgency of climate change and the global shift toward sustainable energy sources, the company pledged to lower its greenhouse gas emmissions 20-30% by 2030 from the 2016 levels.

In terms of achievements, ExxonMobil has made noteworthy progress.ExxonMobil achieved a reduction in operated methane emissions by 50% since 2016. This achievement demonstrates ExxonMobil’s commitment to its environmental goals and showcases its ability to adapt to the evolving energy landscape. The company's investment in CCS technology has led to the operation of multiple large-scale CCS facilities worldwide, capturing millions of tons of CO2 annually.

The Zacks Consensus Estimate for XOM’s 2024 sales indicates an improvement of 8.3% from the 2023 estimate. The Zacks Consensus Estimate for HLX’s earnings for 2024 is pegged at $9.48 per share.

Cenovus Energy Inc. CVE is making significant strides in leading the clean energy transition. The company has set ambitious goals to reduce its greenhouse gas emissions, with a target to cut absolute scope 1 and 2 emissions by 35% by 2035 from the 2019 levels. In 2024, CVE plans to invest $100 million in targeted emissions reduction initiatives, including carbon capture projects.

In 2022, Cenovus made notable progress in its ESG goals. The company achieved a 32% reduction in absolute methane emissions in its upstream operations from the 2021 levels and a 59% reduction from 2019 to 2022. Cenovus set a milestone to reduce absolute methane emissions in its upstream operations by 80% by the end of 2028 from the 2019 baseline.

The Zacks Consensus Estimate for CVE’s 2024 sales indicates an improvement of 40% from the 2023 estimate figure. The Zacks Consensus Estimate for CVE’s earnings for 2024 is pegged at $2.37 per share.

Canadian Natural Resources Ltd

CNQ is actively participating in the energy transition with a focus on increasing production efficiency and reducing its environmental impacts. The company has set ambitious clean energy targets, aiming to reduce greenhouse gas emissions intensity 40% by 2035, a goal that aligns with Canada's broader climate objectives.

As of 2023, CNQ has achieved a remarkable 8% reduction in corporate direct emissions intensity from its 2018 levels, demonstrating a strong commitment to its sustainability goals. This achievement is a result of the company’s strategic investments in carbon capture and storage technologies, and the implementation of energy-efficient processes across its operations. CNQ has been actively investing in renewable energy projects, including solar and wind energy, which not only diversify its energy portfolio but also contribute to a greener energy grid.

The Zacks Consensus Estimate for Canadian Natural’s 2024 sales indicates an improvement of 8.7% from the 2023 estimate figure. The Zacks Consensus Estimate for CNQ’s earnings for 2024 is pegged at $5.86 per share.